Recovery for the 21st Century
June 30, 2011
Over a year and a half into the recovery, the condition of the American economy is far from satisfactory. Unemployment remains high, job creation meager, and American workforce participation has dropped to near record depths -- the lowest rate in a quarter of a century. The United States will need to create 20 million jobs in this decade to recover from the 7 million lost in the Great Recession, and 13 million are needed for the country's growing population, says the U.S. Chamber of Commerce.
For many states the short-term prognosis is dire. Altogether, 44 states and the District of Columbia are projecting budget shortfalls for 2012 amounting to $112 billion. The upcoming fiscal year, according to the Center on Budget and Policy Priorities, will be "one of the states' most difficult budget years on record. Retiree benefits for state employees add yet another strain, with the states facing a $1.26 trillion shortfall."
- Most states have already taken actions to streamline and downsize government to meet the new economic realities; this has proven to be challenging given the increased demand for state services during the national recession.
- Determining where to cut and where to invest is the central challenge of the day.
- States must carry out short-term strategies to jumpstart and/or sustain an as of yet lackluster recovery and cut costs to make state government more efficient and to avoid financial calamity.
- Simultaneously, though, they must craft and invest in innovations and structural solutions that will foster long-term economic growth while reining in taxes and regulations that stifle job creation.
The U.S. Chamber for Commerce's 2011 Enterprising States study highlights state-driven initiatives to 1) redesign government, including measures to deal with excessive debt levels that inhibit economic growth and job creation and 2) implement forward-looking, enterprise-friendly initiatives with a primary goal of creating the conditions for job creation and future prosperity.
Source: "Recovery and Renewal for the 21st Century," U.S. Chamber of Commerce, June 20, 2011.
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